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Vol 5 No 23
November 2014
The Motivation for Corporate Institutions to Invest Funds in Public Schools
Raj Mestry
University of Johannesburg
Jacques Verster
University of Johannesburg
Doi:10.5901/mjss.2014.v5n23p176
Abstract
More recently, the state has tactfully appealed to corporate institutions to channel available funds to public schools. The Broad
Based Black Economic Empowerment Act of 2003 stipulates that corporate institutions should spend at least one percent of its
profit after tax on socio-economic development. Corporate institutions have the option of directing funds to educational
institutions or steering funds to institutions outside of education. This paper examines the rationale behind corporate institutions
providing funding to public schools: Some of the corporate institutions may want to realise economic growth over the long-term;
some hope to gain or sustain consumer and employee loyalty in the short/medium-term. A qualitative research method was
used to explore the motivation for corporate institutions, located in the central district of Cape Town, channeling funds to public
schools. This study was anchored on the assumption that the sustainability of corporate funding in public schools is dependent
on the achievement of high returns (or excessive profits). Some findings revealed that corporate institutions use stringent
criteria to provide funds to schools; community relations are strengthened when schools are provided with additional funding;
and the sustainability of funds in public schools is potentially dependent on the level of employee and community involvement.
Keywords: corporate, funding, social responsibility, state, public schools, funding proposal
1. Introduction and Background to the Problem
The inability of the state to fund public schools sufficiently has compelled public schools to explore other avenues of
funding that will enable them to provide quality education for all learners. Even though section 34 of the South African
Schools Act (South Africa, 1996), makes provision for the state to fund public schools on an equitable basis and
acknowledges its responsibility of making education more affordable and accessible to all, especially the poor, the state is
unable to achieve its mandate with limited financial resources.
According to the National Norms and Standards for School Funding (NNSSF) policy (South Africa, 1998), all public
schools should be ranked and funded according to quintiles. The quintile rankings of public schools are based on the
poverty or wealth levels of the community; the available resources of schools according to the School Building Audit; and
the income levels of parents/guardians of learners using the Community Poverty Indicator Survey. Poor schools (quintile
1 and quintile 2) will receive more funding from the state than affluent schools (quintile 4 and quintile 5). The middle of the
range schools are classified as quintile 3 and receive a subsidy referred to as the ‘adequacy benchmark’. Schools will
receive a minimum amount or more (quintile 1 and 2) or less (quintile 4 and 5) than this ‘adequacy benchmark’ depending
learner enrolment. For the past sixteen years, quintile 1 and 2 schools have been declared “no fee” schools and are
legally prohibited from charging user-fees or school fees from parents (Motala & Dieltiens, 2010:2). More recently, to
alleviate the financial burden of poor parents, the concept of ‘no fee’ schools has been extended to the middle of the
range (quintile 3) schools.
Despite substantial funding from the state, learner performance and the provision of quality education in poorer
schools has not improved significantly. However, affluent schools continue to perform favourably despite receiving less
funding from the state (Motala & Dieltiens, 2010:2). It appears that equitable and democratic participation in quality
teaching and learning practices in public schools are dependent on substantial funding, and the wealth and influence of a
school’s community (Karlson, McPherson & Pampallis, 2001:144-145), rather than on increased state contributions
(Veriava, 2010:12). Hence, schools serving wealthy and influential communities have greater access to physical and
financial resources, and attract better qualified teachers than poorer schools (Karlsson, et al., 2001:144-145).
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The quintile 4 and 5 schools are legally allowed to charge school fees (South Africa, 1996) and they have the
means to further enhance the quality of teaching and learning practices offered (Spaull, 2012:12) through various
fundraising initiatives (Hanushek & Wößmann, 2007:20; Veriava, 2010:12). These schools can afford teacher salary topups to attract the best available teachers, employ additional teachers above the post-provisioning norm determined by the
Department of Education to reduce the teacher-learner ratios, and upgrade school infrastructure to enhance the delivery
of quality teaching and learning practices (Veriava, 2010:12). These opportunities are often denied to the many poor
schools (Seekings & Natrass, 2006:396). Many of the SGBs of poorer schools lack the necessary financial knowledge
and skills to come up with innovative or creative ideas to attract additional funding. Some SGBs are not competent or not
always committed to find ways of supplementing state funds to enhance quality in education practices (Blake, 2008:9395; Makhubela, 2005:58; Statz & Weber, 2010:8-11). The competence of SGBs in poor schools is further hindered by a
lack of expertise regarding legal matters, financial decisions, business dealings and educational bureaucracy (Pampallis,
2005:23). The commitment of SGBs is restricted by school staff intimidating parent governors, and also that they do not
receive any remuneration for their services and time taken from their full-time employment. Self-employed members of
SGBs are not allowed to render services for a fee due to potential conflicts of interest (Tladi & Mulaudzi, 2003:129-130).
Although most SGBs are aware of the importance of raising additional funds to enhance education quality, they
don’t put measures in place to implement successful fundraising initiatives (Author 1, 2004:129; Blake, 2008:93-95).
Research has shown that fundraising projects such as donations, fun-days, raffles, and sport tournaments are proving to
be unsuccessful, especially where parents and the broader community are forced to contribute from their personal funds
(Flanagan, 2011:1). Also, many SGB initiatives to supplement state resources have been ineffective due to poor planning
and ineffective organisation, and/or their lack of creativity and innovation (Griesel, 2011:370). To further complicate this
matter, Griesel (2011:370) found that stakeholders quickly become saturated with donation requests from nearby
schools. It is understandable that most schools opt to charge school fees instead of solely relying on fundraising activities
to supplement state resources (Blake, 2008:93-95; Motala, 2005:51). The South African Schools Act (South Africa, 1996)
makes provision for public schools to supplement state resources through levying school fees from parents if they
experience budget shortfalls (Blake, 2008:93-95). Even though affluent schools charge exorbitant school fees they are
compelled to grant fee exemptions to parents who cannot afford to pay, or suffer the consequence of bad debts. The
state invariably claims that free education is provided to all without considering that many affluent schools have to charge
school fees to make up for the low funding received from the state (Makhubela, 2005:54). This belief is turned into action
as non-contributors are protected by pro-poor funding policies focusing on school fee exemptions, social grants and ‘nofee’ schools (Motala & Dieltiens, 2010:1). Although certain parents avoid paying school fees, some simply cannot afford
to pay the fees due to the current economic climate and the ever increasing costs of basic essentials (Pampallis,
2005:29). Parents in poorer communities believe that they do not have to contribute financially to a school (Makhubela,
2005:54). Thus, schools are compelled to find other fundraising initiatives to generate funds from external sources
(interested individuals, corporate institutions, religious organisations and the broader community) to make up for
inadequate state funding and unpaid school fees (Motala, 2005:51).
Based on the above, the research question for this study can be framed as follows: What is the motivation for
corporate institutions to invest funds in public schools?
The sub-questions for this study were:
• What do we understand by the concept ‘corporate funding’?
• What criteria are used by the corporate institutions to invest funds to schools?
• How can SGBs strengthen their initiatives to solicit and sustain corporate funding for their schools?
In the following sections the aim statement and methodology will be discussed.
2.
Aim Statement
The general aim of this study was to investigate the motivation for corporate institutions investing funds in public schools.
The objectives were to:
• understand what is meant by ‘corporate funding’ in public schools;
• establish the criteria used by corporate when nominating a school as a beneficiary; and
• explore how SGBs can solicit and sustain corporate funding for their schools.
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Methodology
To achieve the aim and objectives of the study a qualitative research methodology was used (Caelli, Ray & Mill, 2003:4).
Generic qualitative research was suitable for this particular study since the researchers wanted to understand the
motivation for corporate institutions making funds available to public schools (Leedy & Ormrod, 2005:133). Corporate
institutions were required to provide a clear understanding of why they chose to fund public schools without identifying
quantitative trends of the phenomenon (De Vos, Strydom, Fouche & Delport, 2002:79).
Random sampling was used to select five corporate companies from a population (n=56) of socially responsible
companies listed in the Corporate Social Investment Handbook (Trialogue, 2008:viii-xv; Flick, 2007:27). The Handbook
consists of a list of South African corporate institutions that have funded various organizations including public schools.
The company’s Chief Executive Officers (CEO) or their delegated representatives (finance officers) of every sampled
corporate company agreed to participate in this study. The CEOs/finance officers were approached because we
ascertained that they had final decision-making powers regarding the availability and distribution of funds.
Data was collected through an open-ended electronic questionnaire, telephonic follow-up interviews and media
document analysis focusing on corporate institutions’ social involvement (Leedy & Ormrod, 2005:135). The electronic
questionnaire extracted the institutions’ criteria and motivation for funding various organisations including public schools.
Media and other relevant documents were analysed to support claims made in the questionnaire, and also to provide
additional data that were not feature in the questionnaire. Documents that were analysed included the sampled corporate
institutions’ websites, policies, publications and newsletters of schools who received funding from these corporate
institutions, newspaper articles and other relevant media publication such as the CSI handbook series, Financial Mail,
Economist and Business Times. The telephonic interviews and open-ended electronic questionnaires were analysed
using Tesch’s (1990:142-145) coding method.
To ensure trustworthiness, a pilot study was undertaken with two companies that did not feature in the sample. A
structured, open-ended electronic questionnaire was forwarded to each participant using the same format and sequence
of words and questions (Cohen, Manion & Morrison, 2011:204). Furthermore, Guba’s (1981) trustworthiness model was
used (Krefting, 1990:215-217): To ensure credibility the researcher went back to the sampled institutions’ representatives
to verify the transcriptions of telephonic interviews, analysis of the open-ended electronic questionnaire and media
documents were made. Furthermore, the researchers undertook a literature control to ensure dependability of the study.
Consistency of data was also taken into account in the event that the study had to be replicated with the same subjects.
Finally, to ensure confirmability, the neutrality of the data was considered.
The researchers also devoted attention to the ethical considerations of this study. Ethical clearance had been
obtained from the Ethics Committee of the University of Johannesburg and permission was obtained from the five
corporate institutions sampled. Participants were not subjected to ‘unusual stress, embarrassment or loss of self-esteem’
(Leedy & Ormrod, 2005:101) and corporate representatives were informed that their participation was voluntary and that
they could withdraw from the research at any stage. All participating corporate institutions’ names were changed to
ensure confidentiality and anonymity (Leedy & Ormrod, 2005:102).
4.
Understanding the Concept ‘Corporate Funding’
To elucidate the concept ‘corporate funding’, we need to first understand the concept ‘corporate social responsibility’
(CSR). CSR is the umbrella term for all socially responsible activities which society expects corporate institutions to
participate in to justify the profits they make (Ludescher et al., 2008:322-331). It is a corporate institution’s contribution to
the community’s sustainable development goals (Waddock, 2008:54). The focus is on improving the quality of life of all
citizens by focusing on social and environmental problems (Trialogue, 2008:18). Although CSR is seen as a voluntary
activity internationally, it is legislated locally by means of the BBBEE Act of 2003 (South Africa, 2003). This Act prescribes
that corporate should spend at least 1 percent of its net-profit after tax on CSR (Trialogue, 2008:30).
CSR concentrates on equipping disenfranchised individuals with skills and/or resources to participate actively in
the economy (Esser & Dekker, 2008:157; Trialogue, 2008:19). According to Butler (2009:53), the bulk of disenfranchised
individuals are black. The highly unequal distribution of resources during the apartheid regime is perceived to be the main
cause of this lasting phenomenon (Bray, Gooskens, Kahn, Moses & Seekings, 2010: 177). Therefore, corporate
institutions are expected to support the transformation of the broader society by improving the livelihood of the previously
disadvantaged communities (by redressing past injustices) (Bernstein, 2009:34; Butler, 2009:53; Esser & Dekker,
2008:157).
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From the above discussion, we observe that CSR is synonymous to corporate funding. There is an increase in the
number of corporate institutions that are investing funds in education to fulfil their social responsibility as corporate
citizens (Scherer & Palazzo, 2008:iii). The more popular investments in education by the corporate sector include
bursaries, grants (Bernstein, 2010:299), and educational programmes (Cowley, 2007:1; Robertson, 2007:1).
Internationally, corporate institutions have accepted their social responsibilities as corporate citizens by investing
substantially to school education (Habisch, Mester & Scmidpeter, 2001; Logsdon & Wood, 2005; Maignan & Ferrel, 2001;
Matten & Crane, 2005; Matten, Crane & Chapple, 2003). In the quotation below we see the importance of social
responsibility:
‘The crux of social responsibility is, however, the insistence of the community that business should in every respect be a
“good corporate citizen”, one that produces profits for its owners and investors but simultaneously markets safe
products, combats pollution, respects the rights of employees and consumers and assists the disadvantaged. In short,
businesses are expected to promote the interests of society’ (Van den Ende, 2004:2).
Thus, proactive SGBs of public schools, as part of their creative or innovative approach to fundraising, will aim to
attract as many corporate institutions as possible to ensure sustainable sources of school funding (Motala, 2005:51).
Schools are encouraged to focus on the 20 percent of stakeholders that supply 80 percent of donations rather than
expending energy on fundraising activities that do not yield a substantial return (Adiar, 2011:1). Thus, one of the aims of
fundraising initiatives should be to identify and build mutually beneficial relationships with the 20 percent of corporate
institutions that provide 80 percent of donations (Bernstein, 2010:29). Such relationships are only evident when both
parties share responsibility by challenging one another and ensuring that they account for ‘what they are doing and what
they are not doing’ (Young, 2008:162). SGBs should develop relevant knowledge and skills to ensure and sustain
mutually beneficial relationships when requesting private funding to supplement state resources (Adler, 2008:388-399).
Thus, training and development of fundraising knowledge and skills for SGBs and principals should be made available.
It is vital to understand that the mere availability of corporate funding does not automatically mean that such
funding is and will remain available to all schools (Seekings & Nattrass, 2006:396). Corporate funding in schools should
not be taken for granted. The deep links between corporates and the public schools located in communities which they
serve must be uncovered (Shrivastava, 2008:18). If this matter is not treated with the utmost urgency, the availability of
corporate funding in public schools will be reduced dramatically. The reality is that corporate institutions are not obliged to
provide funding to schools. By simply doing business, paying taxes and creating employment they are indirectly funding
public schools (Bernstein, 2010:34). Corporate institutions that allocate funds to schools that are not in their direct scope
of interest is praiseworthy, but not obligatory, as it has little effect on the nature and quality between the firm and its “real”
stakeholders (Phillips & Freeman, 2008:105). Corporate institutions are funding organizations to fulfil their responsibility
as corporate citizens. They are indeed selective and are no longer giving to whoever knocks on their door (Van den
Ende, 2004:92).
Corporate social spending trends are also slowly moving away from education towards other initiatives such as
combating HIV/Aids and crime (Van den Ende, 2004:69). This slow change is due to evidence that all learners in South
Africa are not receiving quality education; even with increased state and private funding (Bernstein, 2009:4; Motala &
Dieltiens 2010:2). Fortunately, for public schools requesting funding, the common perception amongst corporate
institutions is that commercial success is dependent on a well-educated population (Adler, 2008:388). Corporate
institutions require people who are well-educated to survive and for this reason they will most likely offer support to
schools delivering quality education (Van den Ende, 2004:69).
We used the Deleuzian Rhizomatic Perspective (DRP) theory as a framework to underpin this study. This theory
advocates the concept of ‘the black hole is on the white wall’ (Deleuze & Guattari, 1987:182) which essentially means
that ‘visible reality, symbols and images are not always what they seem to be’ (Schipper & Bojé, 2008:513). A corporate
institution that invests funds in a public school is a social good (white wall), but there exists some self-serving motive
(black hole) behind such an investment; which is not necessarily made public (Schipper & Bojé, 2008:513). By only
concentrating on the social good (white wall), a superficial picture of openness and integrity is created (Ludescher,
McWilliams & Siegel, 2008:328). The self-serving motive (black hole) must come to light. By doing so, we can eradicate
the illusion that corporate institution funding in a public school (and other social causes) is a simple ploy to keep up
appearances (Schipper & Bojé, 2008:513; Waddock, 2008:69; Shrivistava, 2008:183). Interestingly, there are always
social returns for actions motivated by private returns (the same relationship cannot be said for actions purely motivated
by social returns). For example, ‘providing day care may lower the number of juvenile crimes in a community (white wall),
but the firm might provide the day care only because it increases the availability of workers and lowers the cost of
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absenteeism (black hole)’ (McWilliams, Siegel & Wright, 2006:9). The ‘black hole’ is not a pseudonym for a ‘negative’
variable nor does it necessarily mean profit. The ‘black hole’ is the measurable outcome demanded by corporate
institutions that is not necessarily made public (Schipper & Bojé, 2008:513). It could come in the form of a corporate
institution demanding that a mutually beneficial relationship should exist between the donor and beneficiary (Phillips &
Freeman, 2008:114).
5.
Findings
From the document and interview analysis the following four themes emerged:
5.1
Theme one: Sources of corporate funding to public schools
The motivation for corporate institutions investing funds in public schools located in the central district of Cape Town was
investigated. The allocation of corporate funding to public schools was also verified. The participants confirmed that they
made funding available to public schools. Four potential sources of corporate funding to supplement state resources in
public schools were identified: Corporate Social Investment (CSI); Employee Involvement Programmes (EIP); CauseRelated Marketing (CRM); and Customer Relationship Practices (CRP) (Kotler, Hessekiel & Lee, 2012; Hawkins, 2012;
Trialogue, 2008).
CSI refers to financial (at least 1% of profit after tax and non-cash contributions (such as EIP) aimed at developing
and empowering previously disadvantaged and under-privileged individuals and communities (South Africa, 2003;
Trialogue, 2008:18). With reference to EIP, two components were revealed during the analysis of corporate documents,
namely, employee volunteerism and payroll giving. Employee volunteerism, from the perspective of corporate institutions,
refers to the opportunity granted to employees to become part of sustainable initiatives in the community where they live
and/or work. This is in-line with the corporate’s CSI strategy. Employees who join the programme and who dedicate their
free-time to serve the less fortunate receive the following: a financial contribution (from the CSI budget) to put towards the
organisation; and time off to work in the organisation.
Corporate THREE’s Social Report for the 2012 financial year concerning employee volunteerism uncovered the
following: ‘The aim of our employee volunteer programme is to progressively draw Corporate THREE close to the social
causes integral to the business context, for which we all have a responsibility to respond’. To clarify the level of support
given to a school via employee volunteerism, Corporate FIVE specifically stated: ‘The programmes that we initiate are not
there to do their (teachers) work for them, but to act as an additional resource’. To emphasise this point, Corporate
THREE’s Social Report clearly states that: ‘The aim is to increase the capacity of our beneficiaries rather than maintain
their ongoing dependence on us’.
Payroll giving as a component of EIP allows employees to make direct monetary contributions (monthly deductions
from their salaries) to pre-selected (employee nominated) charities as identified by employees. It was revealed that no
public school has thus far been nominated as a beneficiary of payroll giving. It must be noted that the corporates
disclosed that ‘underprivileged public schools do qualify for nomination’ as a beneficiary of payroll giving. The corporate
institutions explained that ‘Payroll giving is capped at 5% of an employee’s salary’. This means that, as an example, if a
hundred employees who earn R5 000 a month donated 5% to an underprivileged school; such a school could have an
additional R25 000 every month to enhance the quality of teaching and learning practices.
Finally, CRM and CRP are acts of “linking monetary or in-kind donations to product sales or other consumer
actions” (Kotler, et al., 2012:82; Hawkins, 2012:1783). The difference between CRM and CRP is the beneficiary of the
donation. CRM activities raise funds for under-resourced schools serving the poorest of the poor. CRP activities raise
funds for affluent schools. It must be noted that, within this sample of corporates, CSI spending (which includes EIP and
CRM) was always higher (or at least equal) and more frequently applied when compared to CRP spending. Table 1
illustrates this finding:
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Table 1: The highest amounts the sampled corporates invested in an individual school
Highest Amount Mentioned in an UnderResourced School
Highest amount Mentioned in an Affluent
School
Corporate ONE
R50 000 per year in one school
R50 000 per year in one school
Corporate TW0
R75 000 per year in one school
R25 000 per year in one school
Corporate THREE
R100 000 per year in one school
R 0 per year in one school
Corporate FOUR
R135 000 per year in one school
R 0 per year in one school
Corporate FIVE
R500 000 per year in one school
R 0 per year in one school
Participant
Corporate ONE has awarded R50 000 to an under-resourced school (CRM) and also paid R50 000 over to an affluent
school (CRP). Corporate TWO awarded R75 000 to an under-resourced school (CSI) and the highest amount mentioned
for an affluent school was R25 000 (CRP). Corporate THREE, Corporate FOUR and Corporate FIVE did not participate in
CRM or CRP and funded individual schools by means of CSI and EIP. Hence, evidence emerged that there is a link
between sources of corporate funding for a public school and the industry in which a corporate institutions operate. To
elaborate this, the sampled corporates who sell groceries and household items (Corporate ONE and Corporate TWO)
used CSI, EIP, CRM and CRP as potential sources of funding for a public school. Corporate institutions who operate in
the financial, insurance or construction industry (Corporate THREE, Corporate FOUR and Corporate FIVE) only made
substantial funding available to public schools in the form of CSI and EIP.
5.2
Theme two: Corporates sustainability of their own economic future
According to the sampled corporate institutions, one of the main reasons to invest in a public school was to be part of the
process of realising economic growth (the so-called black hole) by rectifying the injustices caused by the apartheid legacy
(white wall) (Deleuze & Guattari, 1987:182). Within this context, Corporate TWO’s Chief Executive Officer (CEO)
specifically stated the following in a letter featured in their Sustainability Report for the 2012 financial year: ‘There’s an
ignitable spirit of volunteerism present in every one of us. When we choose to spark it, we find ourselves not so much
reassured that our contribution is of value (realising economic growth), but rather we are humbled by the scale of the
challenges (injustices of the past) people face.’ For this reason, the bulk of corporate funding made available to a public
school occurs in the form of CSI (including CRM and EIP) aimed at rectifying the injustices of the past and to stimulate
economic growth (Bernstein, 2010:34). The sampled corporates perceive the children (as future entrepreneurs [suppliers
and business partners], employees and consumers) will play a pivotal role in promoting South Africa to reach its full
economic potential. Hence, at its core, an investment in a public school is an indirect long-term investment that will help
sustain the corporate institution’s own economic future (Rangassammi & Van Hille, 2011:63; Bernstein, 2009:34). This
can be achieved by helping mainly those learners who do not have adequate financial support to realise their full
economic potential (Modisaotsile, 2012:3; Van der Berg, 2008:14-15).
By investing in a public school, corporate institutions are accorded the opportunity to build a reputation as a
compassionate organisation that is willing to invest in South Africa’s people. Corporate ONE specifically stated: ‘We are
allowed to give feedback to our customers on donations we made through our website and through PR activities. If there
are additional branding opportunities, we will negotiate this with the school.’ Corporate TWO revealed that they invest in
schools ‘to nurture a reputation amongst stakeholders for being a compassionate organisation’.
The corporate institutions were also able to identify new business opportunities by means of accessing untapped
markets or tendering as suppliers for state funded education projects. Within this context, Corporate FOUR’s
Sustainability Report for the 2010 financial year disclosed the following: ‘CSI initiatives, such as funding a public school,
are sometimes used by the business units as a way to gain an understanding of new markets. It allows us to be more
responsive to socio-economic and environmental trends. This can also generate goodwill.’ Corporate TWO’s CSI policy
specifically states: ‘Divisions will, wherever possible, establish synergies between commercial priorities and our CSI
involvement. This may involve leveraging our CSI initiatives in order to consolidate our position in existing markets or to
gain access to new business opportunities, such as those offered by supply to government funded feeding schemes.’
By investing in a public school, corporate institutions also gained access to networking opportunities with other
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institutions and state agencies when resources were pooled together to achieve a sustainable impact. Corporate THREE
stated that ‘the pooling of resources is the only real hope to make a significant and sustainable impact in individual
schools and communities. Our aim is to bring about change through working with partners and pooling resources.
Schools create unique opportunities for collaborations and partnerships, which companies have begun to explore for
mutual benefit.’ Within this context, Corporate FIVE stated: ‘We encourage other corporates, state agencies and
individuals to join us in our quest to turn schools into centres of excellence’.
Finally, by investing in a school, corporate institutions believe that they help in the development of a stable and
prosperous society which will ultimately lead to a sustainable supply of consumers, suppliers and employees (economic
growth). Corporate FOUR posits the following: ‘Corporates support teachers and those working in education in their
efforts to ensure that the youth in economically and socially disadvantaged communities have a better chance of
succeeding in life. Helping improve the future living standards in these communities helps to improve the health,
education and productivity of our future employees and also increases the pool of future purchasers of insurance
products.’ The common thread revealed that the probability of achieving the above mentioned business objectives were
greatly increased when employee involvement in CSI practices were the norm. The Social Report for the 2012 financial
year of Corporate THREE made known that: ‘The aim of our employee volunteer programme is to progressively draw
Corporate THREE close to the social causes integral to the business context, for which we all have a responsibility to
respond’. The impact of CSI was greatly enhanced by EIPs as a way of ‘pooling resources (CSI, EV and PG) to make a
significant and sustainable impact’. Hence, evidence exists that the sustainability of CSI funding in a public school is
potentially dependent on the level of employee involvement (EV and PG) a school is able to solicit. Within this
circumstance, Corporate FOUR explicitly stated that: ‘We launched our employee involvement programmes in 2009. Staff
awareness campaigns were developed and implemented to encourage staff to nominate their projects for continued
funding and support’.
In summary, corporates make funding available to public schools in exchange for both private (reputation building;
networking; new business opportunities) and social returns (stable and prosperous society) (Van den Ende, 2004:iv).
5.3
Theme three: Evaluating funding requests made to corporates
This theme provides a good understanding of how various corporate institutions evaluate funding requests received from
public schools. The participants confirmed that corporate institutions follow strict policy guidelines during the evaluation of
a funding proposal.
Based on document analysis we established that each of the sampled corporate institutions had a particular focus
that facilitated the selection process to award funding to schools: Corporate ONE considered schools and projects that
aligned with the CSI policy and strategy. These schools had to be in specific locations or regions and required specific
types of donations. Corporate TWO considered applications that focused on CSI activities primarily in three areas:
education, feeding schemes and HIV/Aids. Corporate THREE had a strong focus on investing in vulnerable communities.
Financial need and academic excellence remains the two major factors considered for access to funding. Corporate
FOUR’s focused on three strategic areas: youth development, youth entrepreneurship and youth security. Corporate
FIVE committed funds to a public school based on the resource needs of the school.
All the sampled corporate institutions had CSI policy guidelines that required schools to adhere to when making
application for funding. Schools were required to submit two reports: a narrative report which involved descriptive
information to explain the purpose for the funding and explain how the intended initiative would impact on school
improvement over a specific period of time; and a financial (budget) report, also known as a statement of proposed
income and expenditure. If funding is awarded, this aspect of the proposal would serve as a monitoring and control tool to
identify problems before the school runs into any financial difficulties.
The common policy evaluation criteria used by corporates once the shortlisting of potential CSI beneficiaries were
established are as follows:
• Schools should submit the funding proposal in a timeous and professional manner along with audited financial
statements;
• Schools should be located in a corporate’s customer catchment area and that they should communicate a
track record of success in the community.
• The proposal should include the contact details of the person with decision-making power and who have the
support of all school stakeholders.
• The SGB and principal should be willing to take ownership of the initiative with clear timelines of how long
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corporate support will be required
The participants emphasized that public schools are required to do a self-evaluation of their funding proposal
before submitting it to the identified corporates. There was consensus that a good funding proposal creates a profound
professional image of the school and ‘makes a good first impression’. The corporate institutions emphasized that they
don’t adhere to ‘cheque-book charity’, but rather concentrate on ‘assisting communities to help themselves’. By
submitting a good funding proposal, the school attests to corporate institutions that they are committed to undertaking
projects with the aim of uplifting the community they serve.
When making the final evaluation of the funding proposals received from public schools, corporate institutions
would use the following criteria:
• Affordability of the requested funding: In most cases, corporate institutions will select the proposed initiative
that requires the lowest amount of corporate resources but one that will be able to make the largest
measurable impact against a real problem affecting the quality of teaching and learning practices in underresourced schools.
• Relevancy of the requested initiative: Corporates evaluate a funding proposal to verify that the target
beneficiaries of the proposed initiative are indeed the poor of the stakeholders of the corporate.
• Consistency with state education policy Corporates show preference to a funding proposal from a school that
is anchored in a researched initiative supported by state policy and intervention. This is aligned with the
corporates’ intention to supplement funding provided by the state. Corporates wish to uplift communities and
understand that the state cannot solve all the social problems of the country on its own.
• Requests should be in-line with an approved CSI plan. A good funding proposal that is submitted timeously
can greatly influence a corporates decision making process when deciding on initiatives to include as priority
items on the CSI plan for the coming financial year.
5.4
Theme four: Relationship building
One of the conditions for corporate institutions funding public schools is to get something back from the funded schools. A
social return should be achieved to allow corporates to realise their business objectives in exchange for funding public
schools. In this way mutual beneficial relationships are built.
To emphasise this, corporate institutions acknowledged that ‘a mutually beneficial relationship must be established
to ensure that a real difference is made to a real problem’. Only once a real difference is made (social return), corporate
institutions are able to realise their business objectives (private returns). Hence, there is evidence that a potential causeand-effect relationship exists between social and private returns. Once a substantial social return (from the perspective of
the corporates’ stakeholders) is achieved, are private returns (reputation building, networking, consumer loyalty, and/or
identifying new business opportunities) realised. A mutual beneficial relationship between a corporate and a public school
is therefore dependent on solving serious social problems affecting the overall academic performance of schools. Thus, a
mutual beneficial relationship is anchored in an initiative that requires corporate funding and support to yield a social
return (Kotler et al., 2012:239-251; Adler, 2008:388-399). The corporate institutions revealed that from their experiences,
initiatives that successfully made a difference to a real social problem met the following requirements:
Corporates revealed that an initiative that addressed a specific need of the community allowed for the realisation of
private and social returns (a mutual beneficial relationship). Within this context, the participant from Corporate TWO
specifically stated: ‘Initiatives must be underpinned by realistic and measurable social development objectives in order to
realise business benefits associated with involvement in the initiative’. The corporate institutions require initiatives to
enhance the quality of teaching and learning practices in schools for them to have the potential to become self-sustained.
Corporate THREE emphasized that: ‘Our aim is to bring about change. We hope to make a significant and sustainable
impact. We try to increase the capacity of our beneficiaries rather than maintain their ongoing dependence on us.’
The other sampled corporate institutions revealed that initiatives must be anchored in good governance and sound
financial control. Within this context, Corporate TWO’s Sustainability Report for the 2012 financial year revealed that:
‘Corporate Social Investment has also been identified as an area of risk. It is essential for divisions to ensure symmetry of
interests and goals when developing relationships with any government entity and importantly that any giving, however
small, is free from even the taint of fraud and corruption.
Lastly, initiatives must be unique and learner-orientated to realise a mutually beneficial relationship. Within this
context, Corporate FOUR stated that a unique initiative answers the following question: ‘What do young people need to
become relevant and successful in their world?’ Corporate THREE added that: ‘The initiative must prove to learners that
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whatever their background looks like, it doesn’t mean that they have to be stuck there. The initiative must encourage
them to have aspirations that reach beyond the limitations of their circumstances’. Hence, the initiative should be unique
and anchored in a creative understanding of how to improve the quality of teaching and learning practices in a school’s
unique context (Kotler et al., 2012:239-252; Adler, 2008:388-399).
To summarise, a mutual beneficial sustainable relationship between a corporate and a school exists when a school
has the potential to become a champion (‘underprivileged schools that overcome challenging circumstances’) in
environments where others fail. This means that a school should focus on developing their ability to continuously
generate unique and context specific initiatives to solve problems in the school with the potential to become selfsustained. If an initiative fails, a mutual beneficial relationship can still be maintained as long as the school remains open
and honest concerning the reasons for failure. The school should identify the causes for failure and present a new
approach with a greater probability of success as established with the experience gained from the failure. Corporate
THREE specifically stated: ‘We constantly strive to hold our beneficiaries accountable for effective implementation of
practice and procedure, but we recognise the difficulties and ongoing challenges that this still presents.’
6.
Conclusion and Recommendations
Corporate funding is an art rather than a simple manual process. Most corporates do not fund schools on an ad-hoc basis
but follow strict policy guidelines to evaluate funding requests from schools. Most corporate institutions are prepared to
invest funds in public schools in exchange for private returns which include: increased sales and a big slice of the market
share; strengthened brand positioning; enhanced corporate image; increased ability to attract, motivate and retain
employees; a decrease in operating costs; and an increased appeal to investors. It is evident that a mutually beneficial
relationship should exist between a corporate and the public schools, so that schools can achieve their goals of providing
quality education.
The focus of this study was to establish the motivation for corporate institutions to invest funds in public schools. It
is evident that successful schools have to submit well-structured funding proposals as one means of persuading
corporate institutions to fund them. This study revealed that the sustainability of CSI funding in a public school is
potentially dependent on the level of employee involvement and payroll giving. Employees are encouraged to become
part of sustainable initiatives in the community where they live and/or work that is in-line with the corporate’s CSI strategy.
Payroll giving allows employees to make direct monetary contributions (monthly deductions from their salaries) to preselected (employee nominated) charities as identified by employees.
In keeping with the findings, the following recommendations are proposed to so that schools can access funding
from corporate institutions thereby enhancing the quality of teaching and learning practices: A training programme should
be developed for SGBs, principals and teachers on how public schools can solicit and sustain corporate funding. The
training should focus the different sources of corporate funding available to public schools; the “how” behind a good
funding proposal; how teachers can utilise available resources to its maximum potential before additional resources are
requested; understanding when and how a proposed initiative can be anchored in a mutual beneficial relationship
between a corporate and a school. We also recommend that Higher Education Institutions develop and offer to all school
and district managers a short part-time course on Financial Management which focuses, amongst others, the leadership
and management of Fundraising Projects.
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